| Are you confused by all the acronyms used for | | | | affected by an employee's marital status and number |
| payroll? Here a few of the most common and what | | | | of dependents. |
| they stand for. | | | | FICA- Federal Insurance Contributions Act which |
| EIN- Employer Identification Number which is issued by | | | | includes Social Security and Medicare tax withholdings |
| the IRS upon request. This should be issued for every | | | | from an employee's paycheck. The Social Security |
| company, but is mandatory for any company with | | | | portion is applied to 100% of an employee's wages, |
| employees. | | | | however the Medicare portion is applied only to the |
| SSN- Employee's Social Security Number which is | | | | amount of wages set and changed yearly by the IRS. |
| issued to any employee who is legally eligible to work | | | | The employer is required to match the total amount of |
| in the United States. | | | | FICA taxes withheld from each employee. |
| W4- The form filled out by a new employee showing | | | | SIT- State Income Tax which refers to your state |
| the employee's name, address, social security number | | | | income tax withholding from an employee's paycheck. |
| and the marital status of the employee as well as the | | | | These withholdings are based on rates set by each |
| number of dependents he/she wishes to have their | | | | individual state. Some states do not have income |
| FIT based on. This form is kept on file by the | | | | taxes for individuals. |
| company. | | | | SUTA- State Unemployment Tax Act. This is a tax |
| W2- The form an employer issues to every employee | | | | that the employer pays and is based on your state's |
| at the end of each calendar year or if the employee | | | | rate per a stated amount of wages per employee. |
| leaves during the current year at the end of their | | | | FUTA- Federal Unemployment Tax Act. This is an |
| employment. This form shows the company's name, | | | | employer paid tax that is based on a stated wage per |
| address and EIN number as well as the employee's | | | | employee and the rate may be adjusted based on the |
| name, address and SSN. It also lists the wages earned | | | | amount contributed to your state fund. |
| that are subject to FIT, FICA and state withholding and | | | | 941- A Federal form filed quarterly to report wages |
| the amounts withheld. This form may also include such | | | | paid, FIT and FICA wages withheld as well as the |
| items as deferred deductions such as employee | | | | employer's contributions to FICA, and the dollar amount |
| contributions to pension or retirement plans and | | | | of deposits made and the dates these deposits were |
| employee health benefits withholdings as well as other | | | | made. |
| withholding or income items that affect the employee's | | | | 940- A Federal form filed yearly to report wages paid, |
| taxable wages. This form consists of several copies, | | | | amount and date of state SUTA contributions made |
| one for the Social Security Administration, one for your | | | | and any FUTA deposits made during the calendar |
| state, employee copies for Federal, state and if | | | | year. |
| appropriate local government filings and copies to be | | | | Please refer to the IRS and your state's web sites or |
| kept by the issuing company and the employee. | | | | publications for Federal, state and local rules and |
| FIT- Federal Income Tax. This refers to the Federal | | | | regulations to determine the current rates in effect, |
| Income Tax withheld from an employee's paycheck. | | | | when and how to make your deposits and what |
| This tax is based on rates set by the IRS and is | | | | reports are required and their due dates. |